Chemicals group Omnia is buying up 100% of Oro Agri Opportunities, a producer of agriculture biologicals, for $100m in a deal that is expected to close in the next two months.

The transaction will add products to and expand the geographical reach of Omnia’s agriculture biologicals business, placing it on an accelerated growth path, the company says.

Oro Agri develops non-toxic and ecologically safe crop protection products, liquid fertilisers and soil conditioners for large-scale agriculture and also smaller pasture, lawn and garden applications.

The US-based group operates in four major global agriculture regions and has production, research and development facilities in the US, Brazil and SA.

"In line with the … ‘green revolution’ in the global agriculture sector, the demand for agriculture biological products is underpinned by the increasing emphasis on nutrient and water-use efficiency, coupled with the rising demand for products that are environmentally friendly, enhance crop performance and improve yields," Omnia Group MD Adriaan de Lange said on Thursday.

The transaction needs to be approved by the Reserve Bank and other regulators. Competition Commission approval is not required in the jurisdictions in which Oro Agri operates.

Omnia is already a global player in the agriculture biologicals and water soluble nutrient markets. The deal includes acquiring 52% of the ordinary shares of Oro Agri SA, not owned by the parent company. Oro Agri and Oro Agri SA will become subsidiaries of Omnia.

Orin Tambo, senior analyst at Intellidex, said on Thursday that at a macroeconomic level it looked like "a pretty good fit" for Omnia’s agriculture business.

"There is a clear opportunity for Omnia to leverage on Oro’s well-developed global network to market and sell its existing range of plant nutrients and biostimulant products," he said.

Other benefits were geographical diversification, accumulation of the "much-needed" research and development capacity of Oro Agri, intellectual property and foreign currency.

But Tambo said the recent operating environment had not been kind to Omnia, with depressed commodity prices and drought-suppressed volumes in its key mining and agricultural markets.

"However, we are seeing slight improvements in these markets. The recovery of the mining sector continues with commodity prices remaining in a stable range and trending upwards in certain cases," he said. "We expect to see an uptick in mining production and improved balance sheets for mining companies, which will be good for Omnia and other suppliers to the mining sector.

"The demand for fertiliser is expected to remain stable to positive for the year ahead."